The International Monetary Fund has warned the Australian economy will take a $130 billion hit due to COVID-19
The IMF released forecasts for the global economy that were less than optimistic.
In Australia alone, the economy is expected to contract by more than 6 percent and lose more than $130 billion.
The economic dive signals the worst bottoming out since the Great Depression when the economy contracted by more than 9 percent.
How Australia compares nationally
The IMF put Australia in the bottom third of the top 20 global economies, with the US, UK and South Korea all coming out on top with a loss of between 1.2 to 6.5 per cent to their respective economies.
However, Australia was predicted to come out of coronavirus better than its cousin – New Zealand.
Despite being praised for its fearless leader, New Zealand’s economy is expected to suffer significantly through the virus and contract by 7.2 per cent.
Italy fared badly as well, predicted to lose more than 9.2 per cent.
Unemployment
It comes as Australia’s unemployment rate this week crept above 5 per cent, with Treasury releasing modelling that predicted this would peak to more than 10 per cent in June.
But the IMF predicted unemployment would remain below 9 per cent in 2020 and 2021, with Australia to fare better than other countries for joblessness.
New Zealand again was expected to suffer through the 2020 and 2021 period, with unemployment to rise to a peak of 9.2 per cent.
The US unemployment rate was expected to creep past 10 per cent, while modelling showed Italy’s rate could surpass 12 per cent.
Not as bad as it all seems?
Treasurer Josh Frydenberg said the IMF forecasting did not take into account the most recent of Australia’s measures, including the $130 billion Job Keeper package.
At last count, Mr Frydenber said more than 800,000 businesses had signed up the package, which would provide them with $1500 per fortnight to pay each employee.
“Australia’s support packages are much greater than those from a number of countries around the world,” Mr Frydenberg said.
“These numbers are not surprising, they reflect the reality that we’re in and the severe economic impact that economies around the world are facing as a result of the spread of the coronavirus.”
